2013 (6) TMI 314 - HC - Income Tax

Disallowance of expenditure - revised return was filed after expiry of the time permitted by Section 139 (5) - Held that - Although there is a judgment of CIT Tax Vs. M/s. Pruthvi Brokers & Shareholders Pvt. Ltd. 2012 (7) TMI 158 - BOMBAY HIGH COURT in favour of assessee, but looking to the tax effect involved in this effect i.e. less than of Rs.10,000/- as the total disallowance was of Rs.4540 24,321 this issue is to be kept open for consideration at appropriate stage in appropriate proceedings. The finding of the Tribunal in this regard is maintained as tax effect in this regard is less than Rs. 10,000/-. Admissibility to carry forward of losses and to recompute the deduction under Section 80HHC (1A) - Held that - This question has already been examined and answered by IPCA Laboratory Ltd. vs. DCIT 2004 (3) TMI 9 - SUPREME Court wherein the judgment of CIT Versus Shirke Construction Equipments Ltd. 2000 (7) TMI 40 - BOMBAY High Court in favour of revenue.

Summary

Issues:
1. Whether the expenditure can be allowed despite filing a revised return after the time permitted by Section 139(5) of the Income Tax Act?
2. Whether the Tribunal's decision on admissibility to carry forward losses and recompute deduction under Section 80HHC(1A) is contrary to previous judgments?

Issue 1 - Expenditure in Revised Return:
The appeal raised the question of whether the expenditure could be allowed even though a revised return was filed after the time limit set by Section 139(5) of the Income Tax Act. The parties agreed that the matter had been addressed by the Supreme Court in a previous case, IPCA Laboratory Ltd. vs. Deputy Commissioner of Income-tax. Consequently, the court decided in favor of the Revenue based on the Supreme Court's ruling.

Issue 2 - Tribunal's Decision on Admissibility of Losses and Deduction:
Regarding the Tribunal's decision on the admissibility of carrying forward losses and recalculating deductions under Section 80HHC(1A), the appellant referred to a Bombay High Court decision in Commissioner of Income Tax Vs. M/s. Pruthvi Brokers & Shareholders Pvt. Ltd. The appellant acknowledged that the tax effect involved was minimal, less than Rs.10,000. Despite the Bombay High Court's decision in favor of the assessee, the court chose to keep the issue open for future consideration due to the insignificant tax effect. Consequently, the court maintained the Tribunal's finding, and the question was decided in favor of the assessee.

In conclusion, the court disposed of the appeal by modifying the impugned order of the Tribunal to the extent discussed in the judgment. The parties were directed to bear their own costs in the matter.